Thursday’s need-to-know money news

Today’s top story: Start prepping for next year’s taxes now. Also in the news: Taking the shame out of rebuilding your finances, 3 reasons to hire a fee-only financial planner, and what you should know about Roth IRA withdrawals.

Do Future-You a Solid: Prep for Next Year’s Taxes Now
Give 2019 You a head start.

To Rebuild Your Finances, Take Shame Out of the Equation
Don’t let your emotions hold you back.

3 Reasons to Hire a Fee-Only Financial Planner
Their focus is on advice.

What You Should Know About Roth IRA Withdrawals
The rules are complicated.

Wednesday’s need-to-know money news

Today’s top story: Need a gift for a college graduate? Consider a Roth IRA. Also in the news: An Olympian’s victory versus debt, how to tackle common home worries with a plan, and the best jobs to have when the economy tanks.

Need a Gift for a College Graduate? Consider a Roth IRA
A gift that will keep on giving.

How I Ditched Debt: An Olympian’s Medal-Worthy Juggling Act
Winning the gold in paying off debt.

Tackle This Common Home Worry With a Plan
Don’t let repairs catch you off-guard.

The best jobs to have when the economy tanks
Is your job economy-proof?

Friday’s need-to-know money news

Today’s top story: Why the new tax law makes Roth IRAs more attractive. Also in the news: 7 ways to save on your next national park trip, how to prep for in-flight interviews and land a job, and the 6 skills you need to be financially successful.

Why the New Tax Law Makes Roth IRAs More Attractive
Taking advantage of tax benefits.

7 Ways to Save on Your Next National Park Trip
A trip that doesn’t have to be too expensive.

Prep for In-Flight Interviews and Land a Job
Interviewing in an unusual location.

The 6 Skills You Need to Be Financially Successful
It’s more than just a budget.

Tuesday’s need-to-know money news

Today’s top story: Straightforward answers to your Roth IRA questions. Also in the news: Disney vacation pros share budgeting tips for trips, how to jumpstart your financial plan by ditching this phrase, and what to ask yourself before dipping into your emergency fund.

7 Straightforward Answers to Your Roth IRA Questions
Everything you need to know.

Disney Vacation Pros Dish Up Budgeting Tips for Trips
More money for mouse ears.

Ditch This Phrase and Jump-Start Your Financial Plan
No more dwelling on the past.

What to Ask Yourself Before Dipping Into Your Emergency Fund
Is it really an emergency?

Q&A: Identify the goal for rolled-over account

Dear Liz: I retired from civil service in 2014. Upon retirement, I requested that my Roth IRA funds be sent to a bank. The funds have been earning 0.6% interest. Is it possible to move the funds to another bank or elsewhere to earn a higher rate? Or, should I leave the funds at the bank until an unforeseeable emergency occurs?

Answer: It’s not clear from your letter whether you withdrew money from your Roth or simply had the whole thing transferred from one custodian to another (the bank). Either way, you’re free to move your money elsewhere. If the money is still inside the Roth, you’d move the Roth. If it’s outside, you’d just move the funds.

Before you do anything, though, figure out your goal for this money. If it’s your emergency fund, then it needs to be kept safe and liquid. An FDIC-insured bank account is likely the best bet, and many online banks are offering somewhat higher rates than you’re getting now.

If you want this money to grow, however, you’ll need to take more risk with it. That typically means investing a portion of it in stocks and bonds. If that’s your goal, look for a discount brokerage or low-cost mutual fund provider. If you’re new to investing, books such as Kathy Kristof’s “Investing 101” or Eric Tyson’s “Investing for Dummies” could be helpful.

Wednesday’s need-to-know money news

Today’s top story: 7 places to get a slice of savings on Pi Day. Also in the news: Choosing between a Roth 401(k) and a Roth IRA, guarding your cash from debit card fraud, and credit bureaus may get a boost from Congress.

7 Places to Get a Slice of Savings on Pi Day
Happy 3.14!

Roth 401(k) vs. Roth IRA: Which Is Better for You?
Making the right choice.

Debit Card Fraud Still Rising; Here’s How to Guard Your Cash
Protecting your money.

Despite Equifax breach, Congress may boost credit bureaus
Rewarding bad behavior.

Wednesday’s need-to-know money news

Today’s top story: How to max out your Roth IRA in 2018. Also in the news: Why smarter cars aren’t saving us money on car insurance, 4 tax breaks that could help those caring for elderly parents, and 5 money moves that will help you retire early.

How to Max Out Your Roth IRA in 2018
Tips to keep you on track.

Why Smarter Cars Aren’t Saving Us Money on Car Insurance
Need a little more time.

If You’re Caring for Elderly Parents, 4 Tax Breaks May Help
See what’s available to you.

5 Money Moves That Will Help You Retire Early
Strategic planning.

Q&A: Don’t get tripped up by invalid Roth IRA contributions

Dear Liz: A friend told me that when he takes out his required minimum distribution from his traditional IRA and pays the tax, he then puts the money in his Roth IRA. I believe since this was not earned income, this was wrong. Who’s right?

Answer: The money contributed to an IRA doesn’t have to be earnings, necessarily, but your friend or his spouse must have income earned from working to make an eligible contribution. Earned income includes wages, salary, tips, bonuses, professional fees or small business profits. Earned income does not include Social Security benefits, pension or annuity checks and distributions from retirement accounts.

Another restriction is that contributions can’t be greater than the amount of earned income. If your friend or his spouse earned $3,000 last year, that’s all he’d be allowed to contribute — not the $6,500 maximum allowed for people 50 and over.

The ability to contribute to a Roth begins to phase out when someone’s modified adjusted gross income exceeds certain amounts. In 2017, single filers’ ability to contribute phased out between $118,000 and $133,000. For married couples filing jointly, the phase out began at $186,000 and ended at $196,000.

The penalty for ineligible contributions is 6% of the ineligible amount. The penalty is owed each year the taxpayer allows the lapse without correcting the oversight. If your friend has been doing this for several years, the penalty will be pretty painful.

He could cross his fingers and hope the IRS doesn’t notice, but the error isn’t that hard for the agency to catch. The IRS would simply need to compare Form 5498, which IRA custodians issue to report contributions, to your friend’s income and the sources of that income to know whether he was eligible to put money in an IRA.

Thursday’s need-to-know money news

Today’s top story: 5 signs you’re getting bad financial advice. Also in the news: What a financial advisor does, how Roth IRAs can help in an emergency, and why Wells Fargo customer should check their bank accounts.

5 Signs You’re Getting Bad Financial Advice
Who’s really looking out for you?

What Does a Financial Advisor Do?
Reaching your financial goals.

How Roth IRAs Can Help in an Emergency
An emergency backup fund.

Wells Fargo Customers Should Check Their Bank Accounts
There’s been a “glitch.”

Thursday’s need-to-know money news

Today’s top story: 5 tips to get back on budget after the holidays. Also in the news: Thinking twice about that in-flight credit card offer, how a Roth IRA works, and how paying your child an allowance can pay off in the long run.

5 Tips to Get Back on Budget After the Holidays
Reigning in the spending.

Think Twice About That In-Flight Credit Card Offer
Reading the fine print.

How Does a Roth IRA Work?
Know this important retirement tool.

Paying allowance can pay off, if you do it right
How much is enough?